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Do U.S. Workers Really Have to Rely on Canadian and Mexican Negotiators to Look Out for Our Jobs?

September 23, 2015

Throughout 2014 and 2015, the Barack Obama administration and cheerleaders for the Trans-Pacific Partnership (TPP), including the U.S. Chamber of Commerce, have bragged about the “job creation” effects of the TPP. Others have been more skeptical, including the Economic Policy Institute and the Center for Economic and Policy Research.

[by Celeste Drake, AFL-CIO]

Those who believe that the TPP will destroy more jobs than it creates have plenty of evidence to support our claim based on prior trade deals (nearly 700,000 U.S. jobs displaced due to the North American Free Trade Agreement (NAFTA); 75,000 U.S. jobs displaced by the more recent Korea Free Trade Agreement; and the 3.2 million U.S. jobs displaced to China since it joined the World Trade Organization trade deal).

When the TPP’s backers say “this time it’s different,” it is hard to prove them wrong—given the secrecy of the negotiations. But it seems like every trade agreement the U.S. trade representative negotiates gets sold to unsuspecting Americans as the “best ever,” and the TPP is no different.

This time, negotiators from Canada and Mexico have called foul while there is still time to act—and we’re lucky they did.

The reported “rule of origin” (ROO) agreed to by the United States and Japan would require just 45% of the value of finished automobiles to be made with “regional value content” (content from any of the 12 TPP countries) to qualify for preferential treatment. And for auto parts, the requirement would be a mere 30%!

Last month, Canadian and Mexican officials did the math and said no deal! They objected to these low standards, with Mexico’s Minister of the Economy explaining, “What you can accuse me of” is advocating for “the interests of my country.”

Why aren’t the United States’ own negotiators doing the same? If the reported deal is accurate, it would wipe out jobs throughout the U.S. supply chain. Even with a far higher regional value content rule, U.S. jobs are still at risk to other TPP countries, including Japan, Malaysia and Vietnam. But the lower the regional value content required by the TPP, the more auto sector jobs U.S. workers stand to lose.

Talks on the subject have re-opened, and negotiators are trying again to strike a deal. If the final content requirement fails to exceed the 62.5% required by NAFTA (a three-country deal, as opposed to the TPP’s 12), calling the TPP a “job creation” deal will be just another broken promise. The claims being made about the benefits of TPP almost would be laughable if they weren’t such a tragic prospect. Every job lost is a family devastated. Every plant closed is a community diminished.

The auto industry has been a key driver of the U.S. economic recovery since 2009—and now the entire industry is at risk, not by accident, but through deliberate policy choices.

Now is not the time to sweep the details of the TPP under the rug. The rules matter. Now is the time for U.S. workers to speak up and demand better trade policies—including demanding U.S. negotiators who are more committed to creating jobs here in the United States than they are to responding to the corporate agenda.